Gyne Company makes Product X using special plastic as the main material. The com
ID: 2470428 • Letter: G
Question
Gyne Company makes Product X using special plastic as the main material. The company made 1,000 units of X using 4,800 lbs of plastic. The plastic cost the company $52,800. According to the company’s standards, each unit of X should require 5 lbs of plastic, at a price of $20 per lbs. What cost of plastic should have been incurred to make 1,000 units of X? In another words, what is the standard cost of 1,000 units together?
Use the same information given in the above question. Assume that the company had paid the same price per lbs of plastic that the standard requires. Still the actual cost would have been different from the standard cost by what amount? Also, indicate whether that difference would have been favorable or unfavorable. è $_________ , and Favorable or Unfavorable (choose one)
Explanation / Answer
Total standard material cost = 1000*5*20
= 50000
Total actual cost = 52800
Variance = Actual cost - standard cost
= 52800 - 50000
= 2800 Unfavorable
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